The Industry of Today: Part 1

As you have read, the industry's journey from its rather humble roots of Pong has been a rough one. Over the past few years, though, a question has come up in circles of gamers and enthusiasts across the internet: could the industry suffer another crash? The response to that question is as varied as the amount of people who ask it, and I respond to it with a confident "definitely".

Of course, I'm realistic about that belief. Realistically, the crash could never happen again like it did in 1983, and the primary cause of that is the idea of "The Big Three". "The Big Three" refers to the three most prominent video game developers in the industry right now, Microsoft, Nintendo, and Sony. Of these three, Nintendo is the only company who strictly produces video games, where Sony and Microsoft have a much more diverse business, having influence in computer hardware and software, telephones, music devices, televisions, and other consumer electronics. Compare this to 1983, where the biggest name in the industry was Atari who, like Nintendo, had all of their resources tied to video game production.

In the current industry, the major failure of one of these three companies should not constitute a major crash of the entire industry. The most compelling proof of this comes from Sega who, facing debts and heavy competition, dropped out of the home console market to make software. Subsequently, their presence in the industry was replaced by the likes of Sony and Microsoft, and the industry moved right along with few repercussions.

Let's pose a quick question, though. What would happen in the unlikely event that each of the big three began to suffer major losses in their income at the same time? Let's augment that with another question: what if the "unlikely event" isn't unlikely at all, and is in fact, already happening?

The first question will be covered next blog post, which will be up Friday, November 2, 2012. The second question, however, can be answered in this post with ease: